Retainage
A portion of the contract amount withheld from payment until the work is deemed satisfactorily complete.
Retainage is a percentage of the payment withheld from contractors until project completion to ensure performance and quality. It provides leverage for project owners to ensure that all contractual obligations are met before final payment is made. The withheld amount is specified in an agreement between the contracting party (the party paying for the work) and a contracted party (the person or company performing the work). A common practice is to withhold 5-10% of a contract's total value until a milestone is reached. Then, the withheld amount can be released as a progress payment. When work is substantially complete, the withheld amount can be released as a final payment.
Used in a sentence
A portion of the contract amount is held as retainage until all work is satisfactorily completed.
Synonyms/variation
Retention
Stay updated on what’s happening in construction.
Subscribe to Blueprint, Procore’s free construction newsletter, to get content from industry experts delivered straight to your inbox.
Learn MoreLearn more about Retainage

How GCs Can Enhance Financial Accuracy with Automation Tools
Automation is super-powering construction. Many teams now use autonomous drones or other self-driven devices to capture progress on the jobsite alongside systems that automatically remind stakeholders to review submittals and respond to requests for information (RFIs). There’s no shortage of places where automation is helping construction professionals get more done with less effort. Still, there’s […]

Construction Accounting Software: Key Features and What To Look For
Commercial contractors manage large and complicated budgets that can have slow payment rates and volatile costs. They also have to accurately allocate job costs based on specific factors such as project, phase, or cost codes. Compliance requirements add another layer of complexity to construction budgets, since contractors have to track measures such as prevailing wages […]

Are Construction Financial Systems Ready for Next-Gen Technology?
Are construction financial systems equipped to handle the demands of next-generation technology? In episode 7, we’ll explore the evolving role of the construction CFO and whether financial leadership is truly ready for the advancements in data analytics, ERP integration, and automated platforms—or if cultural resistance is still holding back progress. What are the organizational barriers […]

BIM for Construction Cost Control & Budget Management
As the construction industry advances in its digital transformation journey, building information modeling (BIM) is becoming increasingly common. Teams and individuals who push back against using the 3D model and its associated processes usually have one common complaint: cost. Certainly, there’s some investment in BIM software, plus the training required to help team members use […]
How can we improve this glossary entry?
By clicking this button, you agree to our Privacy Notice and Terms of Service.